Everyone is trying to get their head around. That is the lack of wage growth. Megan this is a strong piece about something we are deeply fascinated about. American workers, global workers are fascinated about. And that is, why, we see unemployment reaching or touching lows, a full unemployment state, why are we not seeing wages growing faster . Traditionally if you have a compression, more demand for workers, we have millions of open jobs in america but we still see stagnant or slow wage growth. And what we are really exploring is this is not just an american , phenomenon, its global. Places like japan and the u. K. But, how we can jump start the wage growth. It is difficult to pinpoint to civic reasons why its happening, but there are measures that can be taken to correct it. Carol they talk about things like advancements in technology, and things you cant rollback at this point. The role of maybe unions and all of this. Megan this is talked about quite a bit. Over the past three decades as we saw membership declining, and union rights stripped away and union power declining. Workers has not given appropriate outlet invoice to push for the kind of wage increases. You talked about tech disruption. Many people argue workers are competing globally as globalism has thrived. They are competing with workers in lower wage economies. They are also competing against robots. When you eliminate wage earning individuals in the form of automation, that will put pressure to keep wages depressed. Because a robot, once you build it, is cheaper than a human being. This disruption is we simply are not measuring the workforce the way we used to. People work in the gigeconomy. Perhaps we are not actually capturing the extent of this disruption to the workforce. Carol they talked about higher union asian and how that unionization and productivity and workers feeling better about their jobs and maybe that might lead to better wages. I thought that connection was interesting. Megan the ultimate objective of the piece is to talk about something that is argued about and talked about at the highest levels, but not at the bottom up union level. This is incentivizing managers to line their own pockets by disturbing the money down to its employees. Rather than distributing the money down to its employees. And making the argument the rising inequality in terms of wages, what your medium income is, is a direct result of enrichment of the top echelon of management and society. And the impact that has. That is something people have been trying to capture. We are seeing the rich get richer and the poor get poorer. So, that is something very important area important. One thing michael does argue for is actually forcing people to draw the connection between the top echelon and rankandfile workforce the mandate there is not too big of a gap between them. The u. K. Has proposed it several times. It never gets much traction. But that would be fascinating to see if that becomes a real trend. Just seeingere not that in the United States, but around the world that gap. , megan it is the biggest economic conundrum of our time. Carol lets talk about the cover story. I love this story. Mark zuckerberg for president . Maybe. Megan what is so interesting about Mark Zuckerberg for president is he is not the only facebook executive mentioned. The other is coo sheryl sandberg. We talked to mark extensively, in when he was rolling out his june, tour of america. When you talk to mark and people close to mark, he is not running. He really just wants to go out there and understand what is going on in america and potentially, worldwide. The Company Faces disruption like it never has before. It is at the crosshairs of the place you do not want to be in the crosshairs, washington and fake news and meddling in the election, special prosecutor Robert Mueller looking at the company and how it was used. These are all things that are severe, severe image issues for facebook. Mark zuckerbergs front and center of trying to deal with that with his outreach to america. Carol we got more from sarah and max. Max i say its the biggest challenge since the ipo. To catch people up, if they missed it, a couple of weeks ago facebook basically disclosed that they had sold during the 2016 election, the company sold 100,000 worth of ads to accounts that looked to have been connected to the kremlin. This is damaging. It has applications for the special prosecutors investigation into russian collusion, but it has implications, more significantly, for facebook, the companys brand. It has potential to bring a lot of ugliness to the floor. Fore. The julia will Mark Zuckerberg play this down . He said the idea was a crazy idea. How you think facebook is looking at this situation . They clearly are helping the authorities, but there is a bigger question about the scope of their influence with 2 billion facebookers out there. Sarah you are right. I think facebook underestimates its own power. Comments like that from zuckerberg, facebook will come out and not take blame for something and then after public outcry will revisit what is our impact on society actually . Then they will start to think about how it can be better. We have seen it with fake news in trending topics, violent live videos. This is another example of facebook realizing we had a huge impact here and maybe we should think about our role. It does seem extremely naive. The company is trying to get smarter about this. Certainly zuckerberg is trying to demonstrate that he understands or is trying to understand facebooks impact by going on this crosscountry tour , and interviewing people in various states he has never been to, and trying to understand how facebook and directs with their lives. A lot of people have said its a very political move. We explore that in the story, but it is also something about zuckerberg trying to be a relentless self improver. He is really trying to grasp what facebooks impact on society has been. Julia max, does facebook need a reality check and to understand better how they are interacting with individuals and the influence they have . A critic would perhaps argue, this tour is more about selfpromotion than understanding facebook and the influence it has. Max a couple of things to keep in mind. People are buzzing about the special prosecutor and the possibility Mark Zuckerberg could be called to testify in congress. The thing to keep in mind is , facebook is really powerful. That is what is driving a lot of the anxiety. The anxiety that maybe facebook had some role in mucking around with the 2016 election comes from the fact that they basically control a lot of the mobile advertising business. They reach 2 billion people. It is probably the most wide reaching certainly the most wide reaching Media Product of all time. He is more powerful i would argue, that any business person on earth. Carol turning Mark Zuckerberg into a cover model was the job of creative director rob vargas. Rob he did not cooperate for a shoot. We had to get creative. We made a list of everything he is playing with right now. Once i saw this list provided by the editor of the story, i was like, that is what we need to put on the cover. We needed to figure out a way to incorporate all these various phrases. The problems that he is dealing with, while at the same time being the head of this huge company. That is where we ended up. Julia the big headline grabber is fake news. That ties into the political environment. And their responsibility, how responsible they are for that. Rob it feels like all this started after the election and all this blame was placed on them. Since then it kept snowballing to all these smaller issues. Carroll i want to go back to the political angle, i be because Mark Zuckerberg is not known for being you dont have him in a hoodie. He does look kind of like a candidate. Rob he has been on this listening tour. It makes people think he might be running for office at some point. It is all speculative. We got a picture of him in a suit looking very political. We decided to go with that one. Carol unions are trading Hotel Workers to face that immigration raids. Julia president obamas raking in big paychecks from wall street. Carol this is Bloomberg Businessweek. Carol welcome back to Bloomberg Businessweek. Im carol massar. Im julia chatterley. You can find us online at businessweek. Com. Labor groups are on the frontline of businesses on president trumps crackdown on undocumented immigrants. Carol they are taking training sessions and having handle visits from ice. Josh we have seen unions this year as there has been a crackdown on undocumented immigrants by the trump administration. We have seen unions at the front lines in terms of protesting, marching, lobbying for legislation. But this story is about other ways unions are doing things really, only unions can do, to protect Union Members and other workers who are immigrants and who are working in the United States in particular i profiled the work of unite here, the hotel, casino and Food Workers Union that has almost half its members contracts, contracts covering always have its members coming up for negotiation in the next year. A priority in those negotiations around the country is going to be restricting companys restricting a companys collaboration with ice. Julia they are going as far as holding how to beat ice classes. Explained to us with his classes are and what they are trying to do to prepare them . Country, unitee has been Holding Training where they go over rights people regardless of the citizen status have once they are confronted with ice. At work, at home, on the street. The right to remain silent and the right not offer up your documents. They train people to exercise those rights and they do it with roleplay. In fact, organizers put on dark jackets and dark glasses. They act out ice agents. The good copy might try to trick the good cop might try to trick you, the bad cop who could screen and be abusive. Than the have workers practice staying calm, not running away, not sharing information, not giving probable cause to the ice agents, not breaking solidarity. Even if someone is a citizen, they are being trained to not provide information to ice. Carol josh, these immigrant workers of the background in backbone, in many ways of the hotel and , hospitality industry. Im curious about the hotel companies. Where are they on this . Josh they have been quiet. A report in the story in february, the president of the union reached out to have them join with him in rebuking what trump was doing on immigration and committing voluntarily to do whatever they can within the bounds of the law to protect immigrant workers. The Major Hotel Chains have not gone that far. They have, marriott and hyatt and hilton, have signed a letter from hundreds of Business Leaders expressing support for the daca program that shields hundreds of thousands of immigrants. But they have not been on the front lines the way the union would like entity. And they have not made the kinds of commitments that the unions would like. Carol president obama is seeing his fortunes rise on wall street. Julia we spoke with max about obamas hefty fees. Max when he was in the white house he was the sort of enemy of wall street. Bankers complained to me an answer to you both about how furious and hurt they were when he used the phrase fat cats. Carol a reminder. It is coming after the financial crisis. There was a lot of stuff going on. Max you can also look at it as a sort of uniform thing. His Justice Department had a chance to try to put the big bankers in jail and they certainly did not do it. The head of his Justice Department essentially said the big banks were too big to jail. Although he recreated rules for the financial system, rules that definitely irked the big banks, he did not break them up when he could have. So, i think it is probably fair to say, he was a moderate who supported some corporate interests. Probably closer, and other than, to Hillary Clinton bernie sanders, given that he is giving these speeches now that Hillary Clinton is saying in her new book she regrets doing it. Carol you mentioned carlyle group. Do we have any idea who . Max we knew about one of them. He will be paid 400,000 and go to cantor fitzgerald, the health two care conference. When i spoke to his friends on wall street, they told me the fact it is like a Health Care Conference gives him a little cover. Per he can at least say i signed the law that is still the law of the land, of the congress is working hard to change that on health care. Reality is it is Like Health Care bankers. Julia Hillary Clinton says she regrets it. What is different about obama . She made a president ial run. Obama had his turn. He cant come back. Is that the difference . If you dont anticipate making a political comeback, you are in the clear . Max one good thing about having a popular story, the most read popular story, and this one was, i think the mostred story at bloomberg for the month, that makes me very proud and proud of my editor, the downside is people talk about it on twitter. They go wild. On twitter a lot of obama fans were like, i would pay to hear him speak. No big deal. He deserves it. Get that money. The oneind hand on hand, i think it is only fair if all the other expresident s got a make that money. Remember when george w. Bush said. Laura and i will replenish the coffers. Julia are they still influential . Obama is still pretty influential. He can back someone and people listen. Phone he can pick up the and get anybody. He is influential. Max that is something we talked about in the story. He is not writing off, into the sunset. He was surfing with richard branson, but he is one of the most influential voices in the democratic party. He helped push tom perez. It was going to be a more liberal candidate. Then it is the redistricting effort where he plays a really big role. The democrats want to avoid gerrymandering, and push against it. Obama is really involved in that. He is an influential voice in the party, no doubt. Julia up next, Ginni Rometty sits down with megan murphy. And a bond king falls to the middle of the pack. Julia this is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek. I am julia chatterley. Carol i am carol massar. You can listen to us on sirius xm channel 119, am 1330 in boston, 91 fm in boston. Julia and in asia on the Bloomberg Radio plus app. Ginni rometty recently sat down ceo Ginni Rometty recently sat down with Bloomberg Businessweek editor in chief megan murphy. Carol their conversation centered around how technology is impacting the workplace and what ibm calls cognitive computing. Here is megan murphy. Megan this was such a fun interview. When i do interviews of people like ginni, what i really wanted to grapple with is two they tensions animating her career. One is questions about artificial intelligence, what they called cognitive computing and watson. There is a lot of speculation that this is the part of the business i need to drive big forward. , and it is not delivering up to the hype. The second thing i wanted to talk about is this tension between questions about a. I. And disruptions in general, and how ibm, americas oldest tech company, is in the constant process of reinventing that business. She has come under fire for her performance at the company as revenues have declined quarter after quarter after quarter. It is always important, and to look at how she is from a personal and Corporate Responsibility in these incredibly difficult times we face, economic disruption, political disruption, how she makes the choice about where to take ibm, where it stands, and where it tries to make it move forward. Carol i found the ibmwatson stuff fascinating. They made a big bet on it. We dont know how the business is doing, do we . Megan we dont. She said watson is right where we want it. A lot of shareholders would disagree. Here is what is so fascinating, and so personal about this interview. Ginni, when they look at someone like her, one of the most known female ceos, they fully form. She is always message impasse and passionate. Her father left the family when she was young. Her mother had to really scramble. She has three siblings. They went on food stamps. To talks about the entitlement program, and how that shaped her she talks about the entitlement program, and how that shaped her in her career and not letting it really to find her. What is so interesting is a is her mother had cancer. When she talks about watson and a. I. One of the biggest areas that they have gone into is health care. This is very personal. It is very personal to her that she believes watson is helping doctors, nurses, Health Care Providers make better decisions. Carol it is three years since bill gross left pimco. Julia the performance at his new company has not been so headline worthy. John this is the threeyear mark coming up when he started managing the jannis henderson fund. That is like a traditional time to look and see how somebodys performance is. And we looked at bill gross. And he has gone from being bond king, the guy who beat 96 of his peers over 15 years, to now being middle of the pack. Julia are his average returns over that time, and wife is and why is three years so important . John they are about 2. 3 at this particular fund. Three years is a good gauge because at least there been a few different changes in the market. You want to see how its going up at times. In the case of a bond fund, when Interest Rates are rising and falling or rising and falling. He has been doing essentially a fund that is supposed to protect investors against rising rates. Bond prices fall when rates rise. But the rates really have not taken off. There was a spike at the end of last year right after trump was elected. And then, they have kind of settled back down again. So, the big megatrend he has been predicting for years really has not come to pass. And his fund has not benefited relative to other funds because of this interest protection strategy. Carol when he was at pimco he had a lot of Institutional Investors putting money with him. What did they think about bill gross now as an investor and money manager . John the first thing people do is look at performance. And there are not that many people who are moving money into his fund. He also has a separate total return fund with a separate manager in europe. The old mutual total return fund, which is also middle of the pack. That is only 276 million. His current fund has 2. 1 billion. About half of that money is from his personal family funds. And then, there is another 800 million. Basically, people pulled more than 300 billion from pimco when bill gross left. This is a fund in turmoil. I dont trust them with my money. But not very much of that money , followed bill gross. Carol of next, the way nestle makes a mint with bottled water. This is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek. A troubling checkup at a Community Health systems. Carol nestles products coming at a cost. All ahead on Bloomberg Businessweek. Carol we are back with editorinchief megan murphy. Megan, so many must reads in the edition this week and the business section specifically, Community Health. At one point, the largest forprofit hospital chain. Megan still is. Run by wayne smith, who has survived and arguably thrived at this business. At the forefront of the broader changes in the American Health care system. Forprofit Health Systems come up with a deal acquire, acquire, acquire and they have a huge amount. Crying to increase the markets in the health trying to increase the markets in the health care. One of their bets was on the expand on medicaid and low income patients. That has been dramatic traumatic, given what we hear about obamacare and what is going to happen. How ruthless you has been driving this forward in a time where, i cannot believe i am saying this, once again we are trying to force through another repeal obamacare this weekend and the next. I do not think the story will be a surprise to anybody who has visited a rural healthcare provider. Unfortunately, there are so many of us who have not been down and the vision of the hospitals in rural areas. They are understaffed and they have too many people requiring services, we have to remember that in areas where people do not have ready access to health care, the hospitals are first port of call for everything from minor injuries to serious things. The kinds of conditions were people have unfortunately become accustomed to, the keeping costs down to keep the facilities profitable, it is intense to do. It leads to accusations of declining care. Carol it does not sound like the ceo is going to change what he is going to do. Megan i look at the stock price. Lets put the ball on the table. This is the big existential debate america is going to have. If you have a forprofit system, you are going to treated the way that you treat any of the roses, to cost down and read profit up. There are many people both of you health care treat any other business, to keep costs down and profits up. There are a lot of people who think of health care is different. This debate will continue to play out in america. The tension between what is acceptable. Carol health care, never an easy discussion. Megan certainly. [laughter] carol lets talk about one of the features, nestles. Will be korea for weeks. Looking at the business of bottled water which is a huge business. I will be talking about this for weeks. Looking at the business of bottled water which is a huge business. Megan it is impossible to go anywhere without access to bottled water. The access to this water, basically how so many of these communities in the u. S. In places around the world have basically given away water rights through lax regulation, hundreds of dollars. Not tens of thousands, not millions as you would expect. It is actually in the hundreds. The story is not about calling names. It is about, have you thought about what it takes and where the water is coming from . Carol Something Like flip michigan, dealing with water flint, michigan, dealing with water issues. You have companies with access to water for pennies who are selling it and making a huge margin of profits. It is shining a light on how access exists. Megan this is a broader existential question, who should have the right to police where water is coming out and who makes the money . It is one of the fundamental tenets of america. Carol we get more from editor brent beacon. Brett nestle is a huge company, the largest food and Beverage Company essentially in the universe. And what we looked at specifically in this story is the bottled water business and how they go about generating the sales that they do. The last number that we had is 7. 7 billion worth of bottled water sales, accounting for half of bottled water sales in the world. In michigan specifically they sell just under 350 million worth of bottled water. They do that very carefully. They tend to go into states across the u. S. That have either very lax water laws or what we would call reasonable use states. These are states that essentially say that hey, as long as you do not disrupt wells or aquifers, you can take what you want. There are other states out there that actually say, if you own the land, you can take as much as you want, no matter what. We look at uw counties in michigan where they operate. In one of them two counties in michigan where they operate. In one of them, they look to bottled water specifically from springs, not the municipal supply. Julia to build your point about the lax water controls in some of these states, they were turned down in oregon, and sylvania, wisconsin as well. Lawmakers were oregon, pennsylvania, wisconsin as well. Lawmakers were wary. Brett you look at the places th brett you look at the places that nestle goes into. We look at everett, 74 below the poverty line. A company like nestle doing what they can come of that is a lot of money. The city of everett makes nearly a year from nestle in terms of money. That money is not coming nearly a quarter of 8 billion a year from nestle in terms of money. That money is not coming from anywhere else. They say that they will rebuild softball fields and redo the lockers and the bullpens. If you are the city of everett, that is very appealing. In addition to the jobs that it creates, nearly 300 jobs by nestle coming to town. Julia is that bribery or just incentive . A big company, infrastructure and benefits. Brett that is what they are providing. I cannot assess that question. What they are skilled at doing is saying, look, we are going to help this city, we are going to help this town economically. For many of these places, there is not a plan b. If they do not say yes to this, they do not have anywhere to go. To be clear, there is a lot of local opposition when this happens. However, there are a lot of local professionals were quite happy to have the business officialss who are quite happy to have the business. Carol how plans to make the world better. We will tell you about the idea factory, jigsaw. Julia this is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek. Carol you can also find us online at businessweek. Com. And on the mobile app . The startup has raised billions of dollars in four years. Julia it may be too late for medical diagnostics. The is a pioneer in the field of human genome mapping. He says that he can do that much more. The whole sequence. Ct scans. They bunch of economic data. His claim a bunch of economic era. His claim is that it is comprehensive, medical tests that have not been devised. He says that of the first thousand people who have taken the test, 40 have discovered some kind of serious illness that they kendrys. Investors have been convinced in a short four years. Ive hundred and 500 million. Valued at 2 billion. While investors are convinced, scientists, not so much. They say that according to a julys hlis own studies it is more like 8 . Carol it seems like the medical holy grail. There are critics of what he is doing. Tell us about that. Some doctors say that this kind of comprehensive test is not helpful in the way that he says it is helpful. Some of the differences between what hlis scientists quoted and the venture sites, that is preventative medicine. The catch is he catches conditions for prediabetes, that is something that can be treated. Julia he could have found it out without 25,000 2500. If you can spot a tumor, that is invaluable. But the mountain of data is too much for trained physicians. Julia talk about that, because it is a 400 page report. If you are handed that, what do you do . Go to a doctor and say help me . A lot of doctors say that you may struggle to separate signal from noise in that respect. The problem is the report. Carol this speaks to a bigger story in every industry, that is data. That is a big part of what he is about. That is the endgame for hli, to build enough of a database for people with genetic code that they can try to draw conclusions that are salable to big pharma about which genes affect aging. Julia the u. K. Government, the United States are already collecting this data. Carol or google is doing it. So many people. Julia facebook is talking about dna. There is fierce competition. What makes this guy different . Jeff he would say that the has the best people. Julia why is he cutting prices . Jeff other projects are threatening to lap his company in terms of scooping up the genetic codes that it sounds like you would need to really compile a database that is useful to big pharma. Carol in the design section, google is trying to solve the worlds biggest problems. Jigsaw is an independent think tank, an incubator under alphabet. It started out in 2011 as google ideas, a unit in google aiming at thinking about the kinds of issues that people coming online for the first time outside of the u. S. , all of these people coming online, how is their experience going to be different . How can people think about helping them get online and getting a better experience . Carol julia julia how do they get in the heads of those people outside the United States to understand what their concerns are, what they want from a product they are looking at . I thought about this when i went to jigsaws office, right above chelsea market. A nap room in the office. It is not just about coding. They have engineers, about 30 engineers at jigsaw. They also send engineers and designers and private project managers on factfinding missions around the world. They went to the ukraine, they took a trip to kenya in the runup to elections to understand how people who are under the most pressure in facing the biggest problems on the internet, direct government attacks, censoring what they are saying, or identity theft, or harassment, deep campaigns of Online Harassment again aimed at taking you offline and getting you to shut up. They are talking to people who were most under pressure in the world and trying to understand all of the challenges that they face. Somethings technology cannot fix but some things, jigsaw has products that are specifically designed to help people stay safe. Julia like what . Dune they have something called project shield. There are a lot of ways the a big adversary online, a powerful government, say, could attack a small website that is reporting something they do not like. Julia an independent news agency. Dune it is very easy to take that offline. They have something called project shield that you can apply for. The technology will help keep your sight online and protect you against attacks. Julia how do they find these companies that need protection from censorship . How do they find individuals . Dune partly it is factfinding missions. Poorly they work with partners around the world. They work with bigger partly they work with partners around the world. They work with bigger news organizations around the world. These companies should be able to find the product and download it pretty easily. They are trying to redesign shield because they discovered that it was a little when you are somebody that is under attack right now when you may not have a lot of technological capability, how can you design this application page to make it is fast and easy as possible and give them the confidence to get through the page as quickly as possible. They are like, i do not understand what is going on and i am under attack. Carol up next, the world of political. Julia where titans of finance turned to learn strategy and patients. Oliver this is Bloomberg Businessweek. Carol welcome back to Bloomberg Businessweek. Julia you can also listen to us on the radio on sirius xm channel 119, and on am 11 30 in new york, a. M. 1330, and 1060 fm in boston. 91 fm in washington, d. C. Carol and in london and in asia on the Bloomberg Radio plus app. Julia for more than two julia where titans of finance turned to learn strategy and decades, a russian grandmaster has taught just to some of wall streetss names. The is the chess grandmaster. One of the top players in the world. Has been for decades at this point. See was one of the most he was one of the most famous soviet defectors in the 50s. He had risen up from a small village in the ukraine and become a threetime ukraine chess champion. He was a really big deal and he came to the west in 1979. He defected in cologne. And any kind of set himself up for the next and then he kind of set himself up for the next couple of decades as not only a prominent refusenik against the soviet regime, but he also became this extraordinary chess teacher and actually writer of trust books. Chess books. That in itself is an accomplishment. Julia he speaks to highprofile people. Carl icahn is one of the names that comes up. Why . Is it about talking to smart people or implanting his knowledge of trust and strategy . It is funny. He has famous friends but it is almost a completely separate group of people who are his clients. And so, through the years, he has had, i mentioned in the article, stephen friedman, the x had goldman sachs, Eliot Spitzer takes lessons from him, for all i can from him for years. Carl icahn took lessons from him for years. I should add that what makes it particularly funny is that these people were coming to albert, who is in a walk up on east 83rd street. It is by no means a palace. These are people that are very,
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